Messages for Business Leaders

The United Nations World Water Development

Report 3

Messages Series

The market grows where the water flows

Do you know where you stand on water?Water is becoming increasingly scarce in most urban areas worldwide. Soon it will start to affect most businesses – it has begun to affect many already. Are you ready, or will you be caught out? What can your business do to reduce or mitigate the effects of water shortages or adapt to changing conditions? Are we heading for a global water crisis? Has the world reached a ‘tipping point’ on water?

Perhaps there are new opportunities for your business?

Water for business Can you rise to the challenge?

Here are a few of the main messages in the report for business and industry:• Improving and developing our water systems – for

agriculture, flood protection and management, energy production, transport, and industrial and domestic use – is one of the keys to social, economic and environmental development. When the politics and management of water are done well, the benefits to countries, cities and communities, including the business community, are considerable. When they are neglected and taken for granted, as they too often are, they hold back development and the damage is intense.

• Business has a real interest in the outcomes of decisions made about the management of water resources. Water is an essential enabler of business activity and market growth. Lack of water and water pollution can seriously limit the competitiveness of businesses and the purchasing power of customers. But managing water well creates opportunities and supports markets.

• The water crisis is real and will become more serious sooner than most people imagine. It is driven primarily by demographics (population growth, urbanization, and migration). Diet and lifestyle changes, mainly through increased food and energy requirements, mean that demand for water is growing between six and ten times as fast as population growth. In many places the crisis is worsened by weak governance, poor political processes and mismanagement. All this is amplified further by climate change, which is increasing the frequency, intensity and duration of droughts, floods and storms. Business can do much to mitigate all this.

• Water is a complex resource. It is a social, an environmental and an economic good all at the same time: its value is a combination of all three. The social dimension requires attention to equity; the environmental dimension, attention to the security of natural resources; and the economic dimension demands efficiency in water use and management. To achieve long-term sustainability, water management decisions need to integrate these three dimensions.

• The main decisions taken about water are political. Diverse interest groups are competing more and more in this political arena. When communities and agriculture demand more water, businesses must step in too and show the importance of their share.

• Lack of investment in the infrastructure for monitoring and measuring water, for data capture and processing, and for decision support tools is hindering good planning and the making of well-thought-out policies. Navigating blind is risky but that is what we are currently doing.

• The main decisions that affect water are not taken by water specialists. Rather, business leaders, heads of state, non-water ministers, consumers and civil society all take decisions and make choices that improve or aggravate the water situation. As a business leader, you need to be aware of the responsibilities you carry and the challenges facing you. Actions that you take in your workplace and along your supply chains, as well as how your products perform and the ways in which they are used by your customers, can all have key roles in the mitigation and resolution of water challenges. There are business opportunities arising that should not be overlooked.

• Business can be part of the solution to the problem of providing a sustainable water supply for everybody.

Messages for Business Leaders | The United Nations World Water Development Report 3

To ensure progress in a changing world, leaders need to take water seriously – to seize opportunities and avert threats.The United Nations World Water Development Report is published every three years. It brings together some of the world’s leading experts to analyse the state of our water resources and report to decision-makers in government, business, civil society and the international community. It provides information on trends and explores the options for action.

The 2009 edition, UN World Water Development Report 3: Water in a Changing World, shows how a converging set of ‘drivers’ is accelerating many local water crises. What is more, many of these drivers amplify each others’ adverse effects. Acting together, these drivers have the potential to create a global water crisis that will have regional and local impacts: from mounting demands and increasing competition between water users to water stress, too little or too much water, unpredictability and the increased intensity of extreme events such as droughts and floods. All of these ‘natural’ events are causing increasing threats and pressures for businesses and industries of all sizes everywhere.

Here are some questions you might find yourself asking in the future:

• Will your business be able to get enough water to operate?

• How might water allocations restrict your supply chain?• What effects will the lack of water security have on

your markets?• Will your customers have enough water to enable them

to use your products or services?• Can you justify your water consumption with regard

to other users?• Can you boost revenue by providing solutions?

If you can’t answer such questions or don’t think they’re relevant to you, think again. The World Water Development Report will help you.

Water will always be a key element in human and business activity. This is so obvious that we often take water resources and our access to water for granted

Water is everybody’s business

Using water sustainably for the good of your business, your markets, your customers and the societies that support you is your responsibility.• Water shortages and changing rainfall patterns mean

that water use per unit of output must be reduced significantly. This will involve adapting manufacturing and cooling technologies and increasing our use of reclaimed water and stormwater. It will require a change in the culture of the workforce and the supply chain towards using water only where there is no alternative and where the quantity used is minimal. It will also be necessary to limit the water-intensiveness of the products and services we supply.

• The emerging concepts of virtual water, water footprint accounting, and impact assessment and reduction are all combining to make sustainable water management a criterion for corporate accountability. It is becoming increasingly important for businesses to know and be able to show, transparently, how much water they use - anywhere in the world and at every point in the supply chain - to produce and deliver their goods or services.

• Water scarcity and pollution risks may be greater further along companies’ supply chains than in their own operations. Current corporate disclosure of water-related risks is inadequate and should be included in the regulatory filings that investors rely on. Investors should assess the vulnerability of their portfolios to the problems of water resources, water availability, pollution and flooding.

• Water quantity and quality are business risks that need to be managed in order to ensure sustainability for all businesses. Sanitation issues impact tremendously here. Investment in sanitation is a long-term investment in any organization’s health and sustainability. Healthy populations are good for business. Reducing illness from poor sanitation contributes to productivity and increases real income – thus contributing to the economic health of communities. The economic benefits of investing in sanitation are approximately ten times the value of the original investment.

• These growing pressures on water supply and sanitation are likely to increase the cost of water significantly, perhaps by more than twenty-fold over and above inflation over the next ten to twenty years.

• And here’s the business opportunity: there is great scope for businesses to innovate to find products, processes and solutions that help overcome the water crisis. Positive action by businesses now can make a real difference.

Why worry about water? Find solutions instead!The current neglect of water issues is a scandalBetween one-third and a half of the world’s population do not enjoy an acceptable standard of water and sanitation. Many of these people are at the ‘bottom of the pyramid’. Large areas of landscape and aquatic ecosystems are disappearing. Business costs are rising and opportunities are being lost. Imagine the benefits to everyone if all this was put right!

Political determination, the social and environmental aspirations of society, and business initiative and innovation are real forces that could combine to achieve this. The World Water Development Report details the challenges facing the world’s freshwater resources and points to many solutions.

Businesses and industry are significant stakeholders in society. You have the opportunity to be part of the solution to the water crisis. Many companies are already striving for continual improvement in how they tackle water issues. Others strive for technical innovations or endeavour to change customer behaviour. But more than that can be done by taking an active role in engaging with politicians and other groups – to work together to overcome the growing crisis, for the good of all.

Water is everybody’s business... make sure it’s yours too

Messages for Business Leaders | The United Nations World Water Development Report 3

The United Nations World Water Development Report 3: Water in a Changing World

The report is presented together with a case study volume: Facing the Challenge. Adopting the premise that local actions and on-the-ground insights are the starting point of a global strategy to improve management of the world’s freshwater resources, these 20 case studies from around the world examine water challenges and the differing management approaches taken in response in Bangladesh, Cameroon, China, the Cholistan desert (Pakistan), Estonia, the Han River basin (Republic of Korea), Istanbul (Turkey), the Lake Merín basin (Brazil and Uruguay), La Plata River basin (Argentina, Bolivia, Brazil, Paraguay and Uruguay), the Netherlands, Pacific island states, the Po River basin (Italy), the Autonomous Community of the Basque Country (Spain), Sri Lanka, Sudan, Swaziland, Tunisia, Uzbekistan, the Vuoksi River basin (Finland and the Russian Federation) and Zambia.

SC-2009/WS/14

Water is vital to all aspects of human life. Using water wisely and managing our water resources is an essential component of growth, socioeconomic development and reducing poverty. Yet around the world we see water scarcity problems rising. And if we don’t take action, they risk becoming even more severe.Coordinated by the World Water Assessment Programme, the United Nations World Water Development Report 3: Water in a Changing World is a joint effort of the 26 United Nations agencies and entities that make up UN-Water. The report

brings together some of the world’s leading experts to analyse the state of the world’s freshwater resources: it monitors changes in our water supplies and in how we manage them, and tracks our progress towards achieving international development targets. Water in a Changing World also provides decision makers with the tools to implement sustainable use of our water – offering best practices to help stimulate ideas and actions for better stewardship of this most essential resource.

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